Tuesday, April 05, 2016

The first head rolls

The first head of state to fall because of the Panama Papers is Iceland Prime Minister Sigmundur David Gunnlaugsson. His "sins" may seem small time compared to the big time crooks like Jaime Dimon and Lloyd Blankfein, but the Icelanders have shown little taste for financial hanky-panky and a refreshing speed in cleaning house.

The resignation of the prime minister, Sigmundur David Gunnlaugsson, was the first prominent political fallout from the document leaks, which have shed unflattering light on the private financial activities of many rich and powerful people around the world.

Mr. Gunnlaugsson’s resignation was announced on television by Sigurdur Ingi Johannsson, a government minister and the deputy chairman of his Progressive Party, and it was confirmed by the state broadcaster, RUV.

Mr. Gunnlaugsson had insisted on staying in office after the leaked documents revealed that he and his wealthy partner, now his wife, had set up a company in 2007 in the British Virgin Islands through the law firm, Mossack Fonseca. The documents also suggested that he sold his half of the company to her for $1, on the last day of 2009, just before the implementation of a new law that would have required him as a member of Parliament to declare his ownership as a conflict of interest.

Mr. Gunnlaugsson had said that the leak contained no news, adding that he and his wife, Anna Sigurlaug Palsdottir, had not hidden their assets or avoided paying taxes.

But the company, Wintris Inc., lost millions of dollars as a result of the 2008 financial crash, which crippled Iceland, and the company is claiming about $4.2 million from three failed Icelandic banks. As prime minister since 2013, Mr. Gunnlaugsson was involved in reaching a deal for the banks’ claimants, so he is now being accused of a conflict of interest.

When asked by Swedish and Icelandic television journalists about Wintris before the publication of the leaks, Mr. Gunnlaugsson stormed out, saying that the journalists had obtained the interview “under false pretenses.” He and his wife then issued statements about “journalist encroachment” in their private lives and said they had done nothing wrong.

Other, larger countries will take longer to come clean and some may just admit it and say, so what? But what we need to remember is that few Americans have been revealed yet, but there is another tranche of files on the way.